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(Alliance News) - The following is a summary of top news stories Friday.
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COMPANIES
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UK government-backed lender NatWest reported a profit for 2021 and said it plans to return GBP750 million to shareholders via a share buyback, with possibly even more to come. This was alongside a final dividend of 7.5 pence, more than double 3.0p the year before. Net interest income for 2021 rose 1.7% to GBP7.61 billion from GBP7.48 billion the year before, though a dip in non-interest income meant total income for the year was flat at GBP10.51 billion - slightly below consensus which had stood at GBP10.70 billion. The lender swung to a pretax profit of GBP4.03 billion, slightly above the GBP4.02 billion expected by analysts, from a loss of GBP481 million the year before, benefiting from an impairment release of GBP1.28 billion versus an expense of GBP3.13 billion. The 2021 profit figure neared 2019's result of GBP4.23 billion.
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Eni swung to a net profit in 2021 as annual operating profit jumped, supported by its Exploration & Production unit. The Rome-based oil and gas company reported an adjusted net profit of EUR4.74 billion for the year, swinging from a loss of EUR758 million in 2020. Eni said this was its best results since 2012 and was driven by an improved operating profit and higher results at equity-accounted joint ventures and associates, as well as a better consolidated tax rate.
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Deutsche Lufthansa said the ongoing effects of the Covid-19 crisis are still putting pressure on business performance but noted signs of recovery. The Cologne-based flag carrier, reported total revenue of EUR10.98 billion for the nine month period from January to September. This broadly stable from a year ago in which revenue totalled EUR11.0 billion. The airline group narrowed its net loss to EUR1.88 billion from a loss of EUR5.58 billion. Its earnings before interest and tax also narrowed, to a loss of EUR2.12 billion from a loss of EUR5.86 billion.
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Hermes International said annual profit and revenue rose last year compared to both 2020 and 2019, prompting an increased final dividend. The Paris-based luxury fashion house reported net profit had surged 77% in 2021 to EUR2.45 billion from EUR1.39 billion the year before. Against 2019, net profit was up 60% from EUR1.53 billion. Full-year revenue also exceeded both 2020 and 2019 levels, rising to EUR8.98 billion. This represented a 41% increase from EUR6.39 billion in 2020 and a 30% increase from EUR6.88 billion in 2019. Hermes proposed a final dividend of EUR8.00 per share, up 76% from EUR4.55 in 2020.
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Bayer, ther German pharmaceutical and life sciences firm, guided for EUR3 billion sales of Nubeqa following positive results from Phase III ARASENS trial. The trial was evaluating darolutamide - marketed as Nubeqa - plus androgen deprivation therapy and docetaxel. Bayer said the trial shows "statistically significant" increase in overall survival with a reduction in the risk of death by 32.5% compared to ADT plus docetaxel in patients with metastatic hormone-sensitive prostate cancer. "Consistent benefits were also seen across secondary endpoints, which are of key relevance to patients, such as delaying the time to castration-resistant prostate cancer, time to pain progression, time to first symptomatic skeletal event and time to initiation of subsequent systemic antineoplastic therapy," the company said.
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Syncona said it has completed the sale of Gyroscope Therapeutics to Novartis. The London-based healthcare-focused investment trust held a 54% stake in ocular gene therapy business Gyroscope, which Swiss pharmaceutical company Novartis has bought for USD1.5 billion. Novartis has made an upfront cash payment of USD442 million. A further USD700 million in cash is potentially due should Gyroscope achieve agreed milestones. Syncona co-founded Gyroscope in 2016, and held a 54% stake following a USD42 million investment last March. The sale to Novartis was announced a few days before Christmas.
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GlaxoSmithKline said it has voluntarily paused enrolment and vaccination in the Grace phase three trial evaluating its potential respiratory syncytial virus maternal vaccine candidate, as well as two other trials investigating this candidate in pregnant women. "This decision was made following a recommendation from the Independent Data Monitoring Committee based on an observation from a routine safety assessment. Monitoring safety signals is an integral part of the clinical development process for potential new vaccines," the pharmaceutical firm said, adding it will provide a further update in due course. This decision does not affect the AReSVi 006 phase three trial for RSV older adults, with results from this study on track for the first half of 2022.
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Renault returned to net income profit in 2021 despite the impact of semiconductor shortages and rising raw material prices. The Boulogne-Billancourt, France-based car manufacturer swung to net income of EUR967 million from a loss of EUR8.05 billion in 2020. Earnings per share also turned green, rising to EUR3.26 from a loss of EUR29.51 a year prior. Revenue rose 6.3% to EUR46.21 billion from EUR42.47 billion year-on-year. However, revenue was down 17% when compared to 2019, when revenue stood at EUR55.53 billion. Chief Executive Luca de Meo said: "Renault group largely exceeded its 2021 financial targets despite the impact of semiconductor shortages and rising raw material prices. This reflects the sustained pace of the in-depth transformation of the Group, initiated within the framework of 'Renaulution'."
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A freighter carrying about 4,000 German cars belonging to Volkswagen caught fire in the Atlantic Ocean south of the Azores, according to the Portuguese Navy. The 22 crew members had abandoned the almost 200-metre-long Felicity Ace and were brought to safety, a spokesman told dpa on Friday. The ship's situation remained stable and there was currently no danger of fuel catching fire or leaking from the ship into the sea, the spokesman added. The fire on the Panama-flagged car carrier, which according to media reports was on its way from Emden in Germany to Davisville in the US state of Rhode Island, had already broken out on Wednesday on one of the car decks.
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Gaming and social media firm Tencent said it strongly disagreed with a US decision to add its WeChat app to a government list of "notorious" markets known for trade in counterfeit goods. WeChat and e-commerce site AliExpress were among those put on the list by the US Trade Representative on Thursday spotlighting markets Washington says "engage in, facilitate, turn a blind eye to, or benefit from substantial piracy or counterfeiting". The 2021 Notorious Markets List flagged 42 online markets and 35 physical markets globally, including other web platforms such as China's Baidu Wangpan. "We strongly disagree with the decision made by the USTR," Tencent said in response, adding that the Shenzhen, China-based company was committed to working to resolve the listing.
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Tesla Chief Executive Elon Musk courted dual controversies, accusing a US regulator of trying to stifle his speech while drawing condemnation for comparing Canada's leader to Hitler. In a letter to US District Judge Alison Nathan, attorneys for Musk, a longtime critic of the Securities and Exchange Commission, accused the agency of propagating "endless unfounded investigations" into the Tesla boss and his company. "The SEC seems to be targeting Mr Musk and Tesla for unrelenting investigation largely because Mr Musk remains an outspoken critic of the government," Spiro said. Nathan oversaw a 2018 agreement in which Musk and Tesla each agreed to pay USD20 million to settle SEC charges that Musk defrauded investors with false claims on Twitter about a possible go-private transaction that was quickly aborted. The settlement also imposed strict rules on Musk's use of social media, requiring pre-approval from Tesla counsel over statements with key financial information.
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US telecommunications and media firm Liberty Global said it achieved all 2021 guidance targets including increased adjusted free cash flow and distributable cash flow growth expected to continue in 2022. For three months to December 31, revenue sunk to USD1.92 billion from USD3.31 billion in fourth quarter year before but generated positive earnings from continuing operations of USD638.3 million, swinging from loss of USD1.03 billion. During quarter, Liberty Global posted organic customer losses 5,200 from 34,400 additions at the same time year before.
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MARKETS
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European markets were trying to stay positive ahead of a weekend that will be long in two senses. The world will continue to watch the Ukraine border for a Russian invasion, despite the promise of a meeting between the US and Russian next week. More prosaically, the US market will be closed on Monday. Ahead of the holiday weekend, Wall Street was called higher.
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CAC 40: up 0.4% at 6,973.16
DAX 40: down 0.1% at 15,253.41
FTSE 100: up 0.2% at 7,549.18
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Hang Seng: closed down 1.9% at 24,327.71
Nikkei 225: closed down 0.4% at 27,122.07
S&P/ASX 200: closed down 1.0% at 7,221.70
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DJIA: called up 0.4%
S&P 500: called up 0.5%
Nasdaq Composite: called up 0.7%
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EUR: flat at 1.1366 (USD1.1370)
GBP: flat at USD1.3623 (USD1.3620)
USD: up at JPY115.14 (JPY115.02)
Gold: down at USD1,893.58 per ounce (USD1,895.50)
Oil (Brent): down at USD91.19 a barrel (USD92.65)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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Russia on Friday said it was withdrawing more tanks and other armoured vehicles from areas near Ukraine's border after running war games that had raised concerns in the West. "Another military train carrying personnel and military equipment belonging to tank army units of the western military district returned to their permanent bases in the Nizhny Novgorod region after completing scheduled exercises," the Russian defence ministry said in a statement. Separately, it said 10 Su-24 war planes were redeploying from the Moscow-annexed Crimean peninsula to airfields in other regions as part of drills. In a later announcement carried by news agencies, the defence ministry said further tank contingents of the western military district were loading onto trains to return to bases after drills. The drawdowns announced Friday are the latest in a series this week that initially spurred hope for a reduction in tensions between Russia and the West over Ukraine.
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The Ukrainian military and their Russian-backed separatist foes traded allegations of fresh ceasefire breaches on Friday, a day after the shelling of a kindergarten sent international tensions soaring. The Ukrainian joint command centre for the eastern front said the rebels had violated the ceasefire 20 times between midnight and 9.00 am local time, while the Donetsk and Lugansk separatist groups said the army had fired 27 times. The reported attacks came one day after a shell blast tore a hole in the wall of a kindergarten in the government-held eastern village of Stanytsia-Luganska. The 20 children and 18 staff inside escaped unharmed, but the incident redoubled fears that Russia may be escalating the conflict while seeking a pretext to invade Ukraine.
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The US on Thursday said Russia is on the verge of unleashing a massive military attack against Ukraine, dismissing Moscow's claim to be pulling forces back, as artillery fire hit a Ukrainian kindergarten. In a dramatic, previously unscheduled speech to the United Nations in New York, US Secretary of State Antony Blinken said intelligence showed Moscow could order an assault on its neighbour in the "coming days." With US and other Western governments saying they see no evidence to support Russia's claim to be withdrawing, Blinken challenged the Kremlin to "announce today with no qualification, equivocation or deflection that Russia will not invade Ukraine. State it clearly. State it plainly to the world." "Demonstrate it by sending your troops, your tanks, your planes, back to their barracks and hangers, and sending your diplomats to the negotiating table," he said. President Joe Biden, at the White House, accused Moscow of preparing a "false flag operation" as a pretext for an attack and said this could happen "in the next several days."
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The US said Thursday that "substantial progress" during negotiations in Vienna to save the Iran nuclear deal had been made, deeming an agreement possible within days if Iran "shows seriousness" on the matter. The Vienna talks, which involve Iran as well as Britain, China, France, Germany and Russia directly, and the US indirectly, resumed in late November with the aim of restoring the 2015 deal. That accord had offered Tehran sanctions relief in exchange for curbs on its nuclear program, but the US unilaterally withdrew in 2018 under former president Donald Trump and reimposed heavy economic sanctions, prompting Iran to begin rolling back on its commitments.
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The eurozone construction sector struggled at the end of 2021, data from Eurostat showed. Construction fell 4.0% month-on-month in December, accelerating from a 0.2% decrease in November. Output had only expected to decline 0.7% in December, according to FXStreet. Annually, construction decreased 3.9% after growth of 0.4% in November. December's weak outturn ended an otherwise solid year for the sector. Construction production for 2021 overall grew 5.2% on 2020.
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The UK retail sector rebounded at the start of 2022 after a disappointing December hit by the Omicron variant of Covid-19, data from the Office for National Statistics showed. UK retail sales rose 1.9% year-on-year in January after a 4.0% fall in December. This beat expectations of just 1.0% growth, according to FXStreet. "After a sluggish December where the Omicron wave had a significant impact, retail sales rebounded in January with their biggest monthly rise since the shops reopened last spring," said Darren Morgan, director of Economic Statistics at the ONS. Non-food store sales rose by 3.4% in January as home improvement sales volumes picked up with increased sales in household goods and garden centres. However, food store sales fell below pre-virus levels for the first time after a 2.3% monthly decline in January, as people ate out more and ordered takeaways and meal kits.
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Japan's core consumer prices edged up just 0.2% in January, slightly less than expected, though the increase was the fifth monthly rise, government data showed. The core consumer price index, which excludes volatile fresh food prices but includes fuel costs, was up 0.2% in January year-on-year, following similar rises from September to December. The advance follows 18 months of declines or stagnation during the depths of the pandemic, but fell slightly short of economist expectations for a 0.3% rise. The increase was also much weaker than the 0.5% registered in December, and when both food and energy prices are excluded, prices fell 1.1%.
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By Tom Waite; thomaslwaite@alliancenews.com
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